The Rise of China

It will be interesting to see how Asia begins to divide and align itself over the coming years. Though kind of scary in the sense that it's all too reminiscent of the shifting alliances of the world wars and the cold war.

At this point I've mostly read of countries that seem to be aligning themselves with the United States, because they're afraid of an increasingly assertive and aggressive China. Miwa's post is the first I've heard of countries "buddying up" with China, though I have to imagine that's going to be inevitable.

Economically the US and other Western nations have to be the better partners. Isn't it agreed that China has to be heading towards economic implosion at some point in the next 50 years? The US might have hit an economic rough patch, but even on a bad day it's a very resilient economy.

This isn't to say that you can't work with both to some degree, but one seems to be the much safer long term choice right now.

Economically the US and other Western nations have to be the better partners. Isn't it agreed that China has to be heading towards economic implosion at some point in the next 50 years? The US might have hit an economic rough patch, but even on a bad day it's a very resilient economy.

This isn't to say that you can't work with both to some degree, but one seems to be the much safer long term choice right now.

Debate over the direction and fate of the Chinese economy could be it's own thread, and you can find a ton of commentary on various economic blogs. Quite a few successful and sharp investors (Soros being the most-cited cheerleader) expect a significant correction or even depression sooner rather than later, but the old saw of markets staying irrational longer than you can stay solvent bears repeating. The issue is a major lack of transparency compared to what you get in almost any western economy. Real inflation rates, NPL data, asset values, employment rates, etc. are either highly manipulated before publication or are simply dictated without regard to the underlying data.

There's no doubt that China has had a tremendous amount of malinvestment in their pursuit of social order through stimulus and low unemployment, saddling it's banking sector with a ton of NPLs and significant real inflation. Ordos,the South China Mall, and the huge number of redundant bridges and roads are the posterboys of this phenomena. The question is, of course, whether or not Chinese growth can continue and allow NPL losses to be gobbled up by productive investments. Given the fact that much of the Chinese productive economy is still firmly wedded to exports and the rest of the world is either growing slowly or on the verge of outright contraction, the external fuel for the internal Chinese export economy doesn't look sufficent going forward.

It'll be interesting in a train-wreck sort of way to see what a severe domestic economic contraction might do to political flashpoints like the East China Sea. The Powers that Be stay there in China by keeping the masses happy, which today means employed and with a bright future. Threaten those, and the next traditional platform any given government uses to stay in power is typically a resort to Nationalism, and for that they need a real and present boogeyman.

I just want to say something. I learned a lot last night while I was just reading up on China. I am revising some of my views on China.

1. We are trying to populate Xinjiang and trying to increase our Han population there to increase control of that area. We are also treating the non-Hans as second class citizens just like how the Israelis treat the Palestinians.

2. China is preparing for war. I use to be really into the Chinese military when I was young and only stopped reading up on the PLA at the end of 2008. From 2009-now I am shocked at the result of modernization. It really really looks like China is preparing for something. However there is still one thing left...China cannot get the logistics right for a modernized army. While the soldier marches on their stomach, the tanks need fuel and that is something China is really weak at.

Debate over the direction and fate of the Chinese economy could be it's own thread, and you can find a ton of commentary on various economic blogs.

I'm not sure how representative a few photos in news articles are, but I'm continually amazed to see China's development patterns. I often see pictures of very large highways cutting through and dividing cities, and lots of detached shopping malls and suburbs, and a lot of Chinese living car dependent lifestyles. It almost seems as though China was in such a rush to copy the United States, that they didn't bother trying to learn from our mistakes.

I guess it just seems strange to me that an aspiring 21st century superpower would be so keen on copying the 1950s American ideal. They'd have a huge competitive advantage if they just spent a bit of effort on looking towards the future.

It also seems to me that this also makes it more likely for conflict to erupt, since they seem to be building an oil and coal dependent economy. Undersea oil deposits seem to be the reason for all these fights over seemingly insignificant rocks in the middle of the ocean.

It is not a 1950s ideal, it is a human ideal. To get rich is glorious.

Domestically speaking, China need to build infrastructure. They need to build bridges and roads. I mean the only reason why America was able to do all this was because the internal transportation system was so developed. China need the shopping malls and all that to increase domestic consumption. I think it is a known fact that if China continue to rely on international trade then China will get loled and pissed on. Now if they started to build bridges between nothing and stores in deserts then we will have a problem.

Internationally speaking, in order to get rich, you need both soft and hard power. However without hard power no one will take your soft power seriously.

Lastly I want to point out something, while part of the reason of why America messed up is due to mass consumption and just excess material wealth. The other part is that America is a democracy. It is hard for a family to make up its mind when every member is bickering about random nonsense. This is also the problem with India. I mean why is it that both India and China were essentially garbage countries in the late 40s and they both changed gov'ts at almost the same time, yet China is now way way way ahead of India. This is due to India's political system. They can never get anything done. You can say whatever about China's political system, but the CCP was able to force the people to take the pain just to test out everything and then be able to succeed. Now I am not saying that democracy is bad and it is a western imperialist idea. But we must recognize issues when it shows itself.

I mean why is it that both India and China were essentially garbage countries in the late 40s and they both changed gov'ts at almost the same time, yet China is now way way way ahead of India. This is due to India's political system. They can never get anything done. You can say whatever about China's political system, but the CCP was able to force the people to take the pain just to test out everything and then be able to succeed. Now I am not saying that democracy is bad and it is a western imperialist idea. But we must recognize issues when it shows itself.

It is not a 1950s ideal, it is a human ideal. To get rich is glorious.

Maybe there's a language barrier here, but I'm not talking about "rich" versus "not rich". I'm not arguing that development is bad, I'm talking about how a nation chooses to develop itself.

It's going to be hard for the United States to develop it's urban landscape to suit the 21st century, because to some degree we're stuck with what was built in the 20th century. It's just not practical to bulldoze everything and start over.

China had the opportunity to start from a clean slate, but I'm not really seeing any indication that they're taking advantage of that fact.

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China need the shopping malls and all that to increase domestic consumption.

You can say whatever about China's political system, but the CCP was able to force the people to take the pain just to test out everything and then be able to succeed.

Yeah, no matter how many tens of millions might have to endure the "pain" of death. Not to mention the countless number (literally — we have no conclusive numbers; estimates are in the 5000 range per year) that are still being executed by the CCP. For Progress!!

I thank you for helping me notice this, I am going to ask my parents to buy my a villa in one of these cities.

But seriously though, this is not a waste. Worst case scenario it is just new places to move rural people to an area that allows the gov't to control them better. One of the biggest social problems in China is house prices, and it will only be a matter of time before these 80s and 90s generation people move here.

You can say whatever about China's political system, but the CCP was able to force the people to take the pain just to test out everything and then be able to succeed.

Yeah, no matter how many tens of millions might have to endure the "pain" of death.

You guys need to stop focusing on that stuff. I am not saying the Great Famine and the Cultural Revolution was a good thing, but it did make us go onto the road of today. I think you guys need to focus on the results. I am not saying that China's method is right or wrong, instead I am going to say it is historically "normal". Every great power has skeletons in their closet.

America is the sole global power right now, why? Slavery for 200 years, fighting wars to gain semi-colonies, selling weapons to gain control of entire regions (Arabia, South America, etc). How many people have America killed?

England...all I have to say is that from the 1700s to the late 1800s the Sun never set on the British Empire.

China had the opportunity to start from a clean slate, but I'm not really seeing any indication that they're taking advantage of that fact.

China has done very well by copying Western society.

It's a very "low risk" way to develop a country.

I don't know that they (or more specifically, their government) really wants to be innovators. They just want guaranteed results, as fast as they can get them. This argues against any kind of experimentation.

China had the opportunity to start from a clean slate, but I'm not really seeing any indication that they're taking advantage of that fact.

China has done very well by copying Western society.

It's a very "low risk" way to develop a country.

I don't know that they (or more specifically, their government) really wants to be innovators. They just want guaranteed results, as fast as they can get them. This argues against any kind of experimentation.

Also you have to remember the huge population China has, even if they started with a clean slate there is no other country with such a large population that has made it close to 1st world status. Even copying the US ins't that low risk when you're managing 1,300,000,000 people vs 310,000,000. China is in uncharted territory.

Also you have to remember the huge population China has, even if they started with a clean slate there is no other country with such a large population that has made is close to 1st world status. Even coping the US ins't that low risk when you're managing 1,300,000,000 people vs 310,000,000. China is in uncharted territory.

I think they are approaching the problem linearly. My guess is that will work.

If the U.S. has X urban areas connected by interstates, China needs 4X urban areas, also connected by interstates.

In terms of how to structure metro areas...Tokyo is a great example and very near by. Otherwise...New York City, Mexico City, Paris, London, etc.

I think the area that they are breaking new ground is mostly related to how to deal with a lack of resources.

Also you have to remember the huge population China has, even if they started with a clean slate there is no other country with such a large population that has made it close to 1st world status.

That's exactly my point. America's growth patterns probably aren't sustainable here, let alone in a country with more than 1.3 billion people. Spread out suburbs and car-dependency is a horrible idea for China to be copying.

AmigaPhreak wrote:

China has done very well by copying Western society.

It's a very "low risk" way to develop a country.

As you yourself point out in a later post, they could still have chosen to copy NYC, London, or Paris.

As you yourself point out in a later post, they could still have chosen to copy NYC, London, or Paris.

I am not sure what your point is here. I think they are copying the generalized Western metro areas now. Whether that is Tokyo, NYC, London, or whatever...

Suburbia and cars and highways is not the most efficient way to build a civilization, but when land is cheap at the fringes, that is what will happen. Unless you drive development by policy (extremely high gas taxes, limiting "sprawl" by preventing annexation/purchase of land, etc), you can't stop it.

So, I guess I am not sure if your comments were venting or that you see a reasonable alternative that hasn't been described yet in this thread.

Spending tons of money on things that just sit there unused is pretty much the definition of waste. Buildings, unless they are maintained properly, are going to break down. Spending money maintaining buildings that no one lives in also seems like it could go to more productive things.

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You guys need to stop focusing on that stuff.

Mismanaging agriculture so horribly millions of people die, and then covering it up is the kind of thing that would invalidate a government's rule in most civilized countries of the world. It's also a poster child how badly a central government can mismanage things.

Yea it was all bad back then and even now, but where is China now? I don't want to dismiss those events, but stop living in the past. I mean I remember when I would post about how much I hated Japan because of what they did, people here are saying that I am living too much in the past. Well 1950/1960s is not 2013, it was stuff that happened 50/60 years ago.

Now I am not excusing the CCP for doing what they did. I cannot forgive them for making my mother starve nor can I forgive them for making my Mom and Dad's life miserable due to the Cultural Revolution. Mao can go eat my ass for what he did. I mean the Cultural Revolution was nothing but a giant game that fat monkey started to keep himself amused.

However this entire thing about China in the 1950s/60s/70s is really off topic. China now is not like the China of the 50s, 60s, 70s. Stop thinking that China will do those stuff again in the future. I mean it makes no sense, the people has too much to lose to let some political party cause chaos. Not to mention I doubt the CCP will create chaos when their mission is to stay in power.

However this entire thing about China in the 1950s/60s/70s is really off topic. China now is not like the China of the 50s, 60s, 70s. Stop thinking that China will do those stuff again in the future. I mean it makes no sense, the people has too much to lose to let some political party cause chaos. Not to mention I doubt the CCP will create chaos when their mission is to stay in power.

China still executes an order of magnitude more individuals per year than any other country (IIRC, Iran is around 400/year at worst, best numbers we have for China put it around 5,000/year).

I appreciate what the CCP has been able to achieve in spite of itself, and I don't wish to diminish that. But we shouldn't pretend that the CCP isn't as totalitarian as stewards of a modernizing capitalist economy can be. And we can't ignore the exceptionally steep social stratification that China's development has introduced.

I have to agree with GaoZu that the GLF and CR don't really have a lot to do with contemporary military frictions vis a vis the South China Sea. The future state of the economy, though, certainly does. It's hard to pull a macro crystall ball out of all the alarming micro events occuring there, and empty mega malls, empty cities, and infrastructure over-spend in general are really micro events, no matter how spectacular they look. Taken in aggregate, though, they paint a NPL picture that's pretty scary. How many losses on bad infrastructure bets can the Chinese banking system take before they start to lose the ability to finance more? The answer is: right up till inflation causes social unrest. China can build a lot of redundant real estate and infrastructure as long as they can keep a lid on commodity prices, but that's looking dicier.

Yes, China can consume much more than it's currenty doing, and in doing so provide a massive employment boost to produce the goods and services for consumption, but the culture may be too slow to shift around to that kind of thinking. Thier export economy is going to continue to experience shocks and downturns as both external demand slackens and internal costs pick up, and the internal demand almost certainly won't rise at the rapid rate that would be required to absorb employment losses from the export machine. This will coincidently hammer Australia. I see this as a fairly near-term risk. Looking farther ahead China is facing a demographic & health-care catastrophe that's potentially MUCH worse than what we have here or even Japan.

None of these issues sounds like they're anywhere near what would create any kind of 'Mad Max' societal collapse hysteria, but I also don't think it'll take much social upheaval to look really threatening to the Powers that Be in the CCP. Increasing saber-waving might be seen as a great distractor, with unpredictable, destabilizing consequences.

Suburbia and cars and highways is not the most efficient way to build a civilization, but when land is cheap at the fringes, that is what will happen. Unless you drive development by policy (extremely high gas taxes, limiting "sprawl" by preventing annexation/purchase of land, etc), you can't stop it.

So, I guess I am not sure if your comments were venting or that you see a reasonable alternative that hasn't been described yet in this thread.

That line of discussion stemmed from the speculative Chinese implosion. I think one of the mistakes they're making is not learning from the mistakes of the west, which I think is going to hurt them in the long run.

Though some may think that knocking China down an economic peg or two might make them less aggressive, I suspect just the opposite. By building their growth around fossil fuels and sprawling car-dependent cities, they're just setting themselves up for having to get themselves into resource wars.

I don't really buy the argument that this was an inevitable result of market forces, that there was nothing they could do about it, because China enjoys a level of state control over it's economy that western nations don't have. They could have done whatever they wanted.

Yamaguchi Natsuo, head of the ruling coalition's junior partner Kōmeitō, is in China now to meet with government people there and try to patch relations up a bit. NHK is now reporting that Wang Jiarui, head of the CPC's International Department, has said that the countries might be able to shelve the Senkaku issue "for future generations" once again.

Not sure how strongly this sort of statement is to be trusted, but it's a welcome signal for the region IMO.

I don't really buy the argument that this was an inevitable result of market forces, that there was nothing they could do about it, because China enjoys a level of state control over it's economy that western nations don't have. They could have done whatever they wanted.

Breaking new ground is risky. I don't think their government wants risk. They want guaranteed results, ASAP. That argues for following in someone else's footsteps.

Their level of state control is used to do things quickly, not to do things differently.

I don't really buy the argument that this was an inevitable result of market forces, that there was nothing they could do about it, because China enjoys a level of state control over it's economy that western nations don't have. They could have done whatever they wanted.

Breaking new ground is risky. I don't think their government wants risk. They want guaranteed results, ASAP. That argues for following in someone else's footsteps.

Yes. the CCP is very, very risk averse, because the entire purpose of the Chinese Communist Party is to ensure the survival of the Chinese Communist Party and its rule.

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Their level of state control is used to do things quickly, not to do things differently.

Not exactly. The level of state control is used to ensure the survival of the Chinese Communist Party and its rule.

A lot of the gigantic construction projects in the desert and similar civil works boondoggles are implemented at the local/regional government level, rather than nationally. The technocrats get shuffled around every few years and they want to produce results NOW NOW NOW to make sure they have a track record of economic growth on their watch they can point to when it's time for the next party promotions.

And now the East China Sea is looking even more interesting. Everyone is used to over-the-top commentary from North Korea, but they're starting to reach new levels even for them. The armistice has been unilaterally declared kaput, and the main communications line severed. Talk is cheap, of course, and hyperbole is one of NK's biggest exports, but I'm wondering if the new kid is going to actually do something similar to recent years (shelling an island or torpedoing an unlucky cruiser) to add some bite to the bark.

I wonder how far he'll push it this time. The pokes just keeping getting a bit stronger without actually doing anything directly to US interests.

Hopefully China can step away from that treaty. It is such a one sided treaty. I mean if someone attack China can NK really do anything? Are they going to send us laborers? All jokes aside, I do not believe that Kim Jr. is really this stupid. Warring other states...lol warring states...anyways, warring other states would be a 100% sure way of eradicating the entire NK regime. If Kim Jr. want to be in power he need to get himself back in line with the PRC.

I doubt NK will fall apart anytime soon, not just because the Kims have a tight grip on NK, but the fact that it is in PRC and SK's best interest for NK to not fall. For China we have the obvious reasons of having devils at the doorstep. For SK it would be like the German Unification except on a bigger and terrible scale. GDR at least had an industry and a decently fed population. NK has NOTHING.

Anyone notice that the NK "crisis" has trumped the Sion-Philippino and Sino-Japanese issues? I don't hear about those two events on western media anymore.

The drones could act as decoys, use electronic warfare to jam communications and radar, guide missile strikes on carriers, fire missiles at U.S. Navy ships or dive into ships like kamikaze robots.

Dive into ships like kamikaze robots? Oh you mean like anti-ship missiles? Hey Captain, instead of firing your anti-ship missiles fire this flimsy fake airplane and see if you can sink this ship. That article is one of the biggest bullshit fear mongering articles I have ever read.

Dive into ships like kamikaze robots? Oh you mean like anti-ship missiles?

I've found myself rather surprised by the number of people who don't quite seem to get that cruise-missiles, which have been around for decades, are basically just single-use kamikaze drones. There seems to be some sort of conceptual disconnect.

So you get weird things like the author of that article trying to describe an anti-ship cruise missile in modern drone terms, which gives you the kamikaze robot comment.

Drone attacks of that type would be very, very unlikly to get past the Phalanx CIWS systems all capital ships carry. The only air attack likely to give them trouble is Hyper-sonic surface skimming anti-ship missiles.

If such a conflict takes place, the only thing they will be worried about is torpedo attacks from ultra-quiet diesel electric submarines or automated launchers placed on the sea floor.

Drone attacks of that type would be very, very unlikly to get past the Phalanx CIWS systems all capital ships carry.

Can any defense nerds comment on the volume of incoming missiles such systems can be expected to reliably intercept? I have to assume that at a certain point, they just become overwhelmed and missiles start slipping through.